News Release
07 November 2008
Jamaica Balance of Payments1
June 2008

Provisional data show a deterioration in the current account deficit of Jamaica’s Balance of Payments for June 2008.
This was primarily due to an expansion in the merchandise trade deficit. Net private and official capital inflows were
insufficient to finance the deficits on the current and capital accounts. In this context, the net international reserves
(NIR) declined for the month.

Influenced by higher payments for fuel and manufactured goods imports, there was an increase in the merchandise
trade deficit for the period January to June 2008. This increase was largely responsible for a widening of the current
account deficit over the period. Within the capital and financial account, net private and official capital inflows were
more than sufficient to finance the current account deficit. As a consequence, there was an increase in the NIR of the
Bank of Jamaica for the period.
June 2008
Provisional data indicate that the current account deficit widened by US$101.7
million in June 2008, relative to the deficit in June 2007 (see Table). This
deterioration was largely associated with increased spending of US$69.9 million (155.0
per cent), US$42.5 million (109.8 per cent) and US$35.4 million (18.3 per cent) in the
values of miscellaneous manufactured goods, food and fuel imports, respectively. The
impact on the current account of the growth in imports was partly offset by a 34.3 per
cent increase in earnings from merchandise exports, primarily reflecting expansions of
US$34.5 million (31.6 per cent) and US$19.9 million (109.6 per cent) in the values of
alumina and mineral fuel exports, respectively. The growth in the value of alumina
exports reflected increases of 21.5 per cent and 12.9 per cent in volume and price,
respectively, while fuel-related exports were buoyed by significant increases in the price
of oil on the international market.
An increase in net transportation payments, associated with the higher level of imports,
continued to be the primary influence on the deterioration in the services account.
1
For more details see Balance of Payments Monthly Statistical Update at
http://www.boj.org.jm/publications_home.php
1
For the income account, an improvement of US$20.3 million in the deficit was mainly
attributed to lower interest payments on official external debt, as well as an estimated
decline in the imputed profit remittances of the direct investment companies.
Within the financial account, net private and official capital inflows were insufficient to
finance the deficits on the current and capital accounts. As a result, the NIR of the Bank
of Jamaica declined by US$30.4 million for the month.
January – June 2008
The current account deficit for the period January to June 2008 widened by
US$793.1 million, relative to the comparable period in 2007. A deterioration in the
merchandise trade deficit was the main source of the widening, stemming largely from
significant increases of US$637.6 million (71.9 per cent), US$98.2 million (34.5 per cent)
and US$82.6 million (21.5 per cent) in the values of mineral fuel, miscellaneous
manufactured goods and chemicals imports, respectively. The impact of the expansion
in imports was partly offset by increased earnings from major traditional exports,
particularly alumina and non-traditional exports.
There was also a deterioration on the services account for the review period, driven
largely by increased transportation costs associated with the growth in imports. An
improvement on the travel sub-account, which reflected an expansion of 8.4 per cent in
stopover visitor arrivals, partly offset the impact of the impact of the increased payments
for transportation.
The deficit on the income account deteriorated the period, primarily as a result of
increased interest payments by the government as well as a decline in investment
income inflows.
Higher net current transfers in the review period reflected growth of 11.3 per cent in
gross remittance inflows.
Within the capital and financial account, net private and official capital inflows were more
than sufficient to finance the current account deficit. In this context, there was an
increase of US$351.1 million in the NIR over the review period. At end-June 2008, the
gross reserves of the Bank of Jamaica stood at US$2 476.9 million.
2
BALANCE OF PAYMENTS SUMMARY
US$MN
1/
1/
June
June
2007
2008
Change
Jan-June
2007
Jan-June
2008
Change
1. CURRENT ACCOUNT
-108.3
-210.0
-101.7
-597.9
-1391.0
-793.1
a. GOODS BALANCE
-280.1
-375.7
-95.6
-1552.6
-2316.5
-763.9
Exports (f.o.b.)
188.4
256.9
68.4
1184.0
1344.0
160.1
Imports (f.o.b.)
468.5
632.6
164.1
2736.6
3660.6
924.0
b. SERVICES BALANCE
56.3
24.5
-31.8
288.1
220.6
-67.5
Transportation
-38.5
-62.7
-24.2
-238.0
-312.4
-74.4
Travel
151.9
153.2
1.2
848.7
869.8
21.1
Other Services
-57.2
-66.0
-8.9
-322.6
-336.9
-14.3
-56.1
-35.8
20.3
-311.4
-352.2
-40.8
B. INCOME
Compensation of employees
4.8
5.6
0.8
0.4
6.3
5.9
Investment Income
-60.8
-41.4
19.4
-311.8
-358.5
-46.6
C. CURRENT TRANSFERS
171.6
177.1
5.5
978.0
1057.1
79.1
Official
12.2
10.9
-1.4
67.1
65.0
-2.1
Private
159.4
166.2
6.8
910.9
992.1
81.2
2. CAPITAL & FINANCIAL ACCOUNT
108.3
210.0
101.7
597.9
1391.0
793.1
A. CAPITAL ACCOUNT
-3.2
-2.9
0.3
-18.5
14.7
33.2
a. Capital Transfers
-3.2
-2.9
0.3
-18.5
14.7
33.2
Official
0.0
0.0
0.0
0.4
29.5
29.1
Private
-3.2
-2.9
0.3
-18.8
-14.8
4.0
0.0
0.0
0.0
0.0
0.0
0.0
b. Acq./disposal of non-prod. non-fin'l assets
B. FINANCIAL ACCOUNT
111.4
212.8
101.4
616.3
1376.3
760.0
Other official investment
141.4
110.8
-30.6
353.0
127.8
-225.2
Other private investment 2/
-43.4
71.6
115.0
184.6
1599.6
1415.0
Reserves
13.4
30.4
78.7
-351.1
1/ Provisional
2/ Includes errors & omissions
BANK OF JAMAICA
3